Senate proposal to retroactively tax operators gains traction in Brazil
Lawmakers and the Finance Ministry perceive the measure as a tool to boost public revenue.
Key Points
- Senators are in favor of taxing betting operators for revenues generated before regulation came into effect
- The Finance Ministry estimates retroactive taxation could raise BR12.6bn ($2.25bn)
- Proposals include using funds to compensate victims of social security fraud
A proposal to retroactively tax betting operators has gained support in Brazil’s Senate, building on earlier discussions initiated during the CPI das Bets inquiry in March.
Robinson Barreirinhas, Secretary of the Federal Revenue, first raised the possibility, which quickly attracted backing from opposition lawmakers.
The measure is being framed as both a fiscal and political tool. On one hand, the Finance Ministry sees it as an opportunity to generate BRL12.6bn ($2.25bn) in additional revenue at a time of fiscal pressure.
On the other, senators argue the funds could be directed toward social programmes, with Senator Hiran Gonçalves suggesting they could reimburse victims of frauds involving Brazil’s National Institute of Social Security (INSS).
Although a working group has been set up by the Ministry of Finance to present a formal compliance model in September, various approaches are already under discussion.
One of the main options under consideration would allow companies to pay 50% of the tax liability upfront while settling the remainder in installments.
Good to know: Brazil’s government is developing a unified self-exclusion system for bettors
Lawmakers justify the proposal on the grounds that operators were active in Brazil’s market prior to regulation but did not contribute to tax revenues.
Critics, however, are expected to raise concerns about retroactivity and its impact on the sector’s stability.
The Federal Revenue is already advancing with a compliance programme for licensed operators to ensure ongoing tax collection.
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